July 26, 2021

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Province ‘not doing anything’ on insurance premiums

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North Bay calls for action on rising rates hitting municipalities

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Even with what North Bay Coun. Bill Vrebosch calls an “exemplary record,” the city was still dinged with a 10 per cent increase to its insurance rate this year.

And that was without taking into account cyber insurance.

Speaking at a meeting of North Bay council Tuesday, Vrebosch said even with the 10 per cent boost to insurance premiums, North Bay is still well below some municipalities in the province. Some, he said, have faced insurance premium hikes of 62 per cent.

“Some (municipalities) had to increase their municipal taxes just to pay the insurance rates,” Vrebosch told his council colleagues.

The provincial government, he said, “promised action” on the issue, but “they are not doing anything.”

Last month, the city approved a contract to renew its comprehensive general insurance with Frank Cowan Company Ltd., in partnership with Kennedy Insurance Brokers Inc., for a premium of almost $1.17 million, plus HST, for a one-year term that began May 1.

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The total increase to the premium was $105,000.

“We can’t maintain these increases,” Vrebosch said, adding the city needs to find out from insurers what is causing the increases – and what the city can do to mitigate them.

Council passed a motion calling on the province to “resume, conclude or report, as the case may be, to all municipalities on consultations around joint and several liability,” to adopt similar motions from the Association of Municipalities of Ontario’s presentation to the provincial attorney general, which addressed growing municipal liability and insurance costs, and to support a risk management approach from municipal governments for a more “fair, reasonable and responsible system for liability.”

Deputy mayor Tanya Vrebosch agreed with her council colleague, saying there are only four insurance companies in the province.

“We need to see some action,” she said.

The municipal insurance market in the province is served by four insurers – Frank Cowan Company, now owned by Intact Canada, the global broker AON Canada, Marsh Canada, a global broker that acquired the city’s previous insurer JLT, and BFL Canada.

In a report to council delivered in April, city staff noted there was a period of strong competition three to 10 years ago, but most commercial insurers are now underwriting risk more aggressively and require more premium to “shoulder the risk they choose to insure.

“This is happening in almost all lines and around the world. It is generally recognized as a ‘hardening’ market globally,” the report states.

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Staff say the city absorbed a significant premium increase last year, in excess of the ‘rate stability’ provisions in Frank Cowan Company’s policies.

Despite the city’s “excellent” three-year claims history, staff say its liability premiums, excluding auto primary liability, will rise eight per cent, automobile and transit, excluding excess liability, will increase 25 per cent, and property and machine breakdown will increase 10 per cent.

Overall, the city’s premium, excluding cyber coverage, will increase 13 per cent.

Staff also cited an article from an AMO adviser, who said while Premier Doug Ford announced to delegates of the 2019 ROMA conference that the province would launch consultations into the long-standing concerns around joint and several liability, AMO and the municipal sector have not formally heard back.

The article also points to recent comments from Attorney General Doug Downey, who indicated he may still be unconvinced about the data and its relation to higher insurance premiums.

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